﻿Tan Sri Hasan began his career with Petronas in 1989 as Senior Vice President, Finance, before being appointed President and Chief Executive Officer in 1995 and later also assumed the position of Acting Chairman in 2004.

Mohamed (Mohd) Hassan Marican has been a key part of the management team responsible for turning Petronas, Malaysia’s state-owned oil company, into a truly multinational corporation with a record of consistently steady profits. Trained as an accountant, Marican was described by analysts as forthright and a strong advocate for strict fiscal discipline. Marican stressed the importance of teamwork, and he insisted that Petronas employees meet high standards of integrity and professionalism. As head of a state-owned firm, he worked closely with and earned the trust of Malaysia’s prime minister. He effectively balanced the identity of Petronas as a national firm with its commercial goals through a largely successful strategy of expansion and integration.

Arriving At Petronas and Expanding Its Global Reach

After graduating from college in Malaysia, Marican moved to London and trained as an accountant. Upon his return to Malaysia, he worked in a high-paying position as a partner in an accounting firm before joining Petronas in 1989 as senior vice president of finance. The company was founded in 1974 as a state-owned company, and its national mission focused on managing Malaysia’s oil-and-gas resources as well as continuing to develop the country’s petroleum industry. Petronas was at the forefront of industrial and technological development in Malaysia, and its agenda has been closely tied to the government’s nation-building goals. Until the late 1980s Petronas focused primarily on regulating Malaysia’s domestic resources, and it was only with the arrival of Marican, along with Chairman Azizan Abidin, that the company pursued a more aggressive global strategy.

Consistent with Malaysian Prime Minister Mahathir Mohamed’s stance that his government served as an advocate for underdeveloped countries, Petronas sought partnerships in countries that other petroleum companies avoided or were restricted from investing in. In 1997 Petronas teamed with Chinese partners to turn Sudan into an oil exporter, which occurred in less than two years. Despite a U.S. embargo, Petronas partnered with a French company and launched a successful operation in Iran. Petronas was one of the first companies to invest in post-apartheid South Africa, purchasing a 30 percent stake in Engen, its largest oil-refining company. For Marican, Petronas’s partnership strategy worked well, because the company sought associations with those who shared the Petronas philosophy and work ethic and in which Petronas was treated as an equal. Similarly, partnering countries were increasingly attracted to Petronas because of its nation-building experience, both in Malaysia and elsewhere. To ensure that its partnership strategy remained balanced, Petronas invested in all areas of the petroleum business, from shipping to refining.

After more than a decade of expansion, Petronas had a presence in 35 countries, with almost 80 percent of its revenues coming from global partnerships and exports. By 2003 Petronas reported over $21 billion in revenue, with a net profit of almost $4 billion. Marican refused to take credit for the company’s success and insisted that its accomplishments were “based on solid teamwork” (New Straits Times, May 9, 2003). Marican further explained that Petronas insisted on “commitment, professionalism, integrity and honesty” from its workers, which ensured “that things are done in a proper and professional way.” To effectively manage Petronas’s global concerns, Marican spent half of each year visiting the company’s sites around the world.

Leading a State-Owned Company

One of the biggest challenges Marican faced was in leading a company owned by the state and hence vulnerable to political pressure. Malaysia’s other state-owned and politically connected companies were well known for mismanagement and corruption. Other state-owned petroleum companies, such as Indonesia’s Pertamina, also did not fare well and often became hotbeds for handing out patronage. Although the path Petronas took under Marican set it apart from other state companies, the company became involved in politically sensitive situations. In the wake of the Asian financial crisis of the mid-1990s, Petronas was called on to bail out a shipping operation controlled by the prime minister’s son. Petronas also bought control of the Malaysian automaker, Proton, and the possibility was raised of the company’s buying Malaysia Airlines. With its considerable cash reserves, Petronas was asked by the government to serve as a property developer, taking over ownership, for example, of the Petronas Towers in Kuala Lumpur.

Analysts raised concerns about the fact that Petronas was asked to serve as a kind of treasury for the Malaysian government that might be called upon to rescue state-owned or politically sensitive corporations whenever necessary. Observers worried that the more involved Petronas became in activities not related to its core petroleum business, the more its resources would be stretched and the more uncertain the company’s long-term outlook would become. Since Petronas reported directly to the prime minister’s office, its full financial reports were not made public, thus depriving the company of the total fiscal transparency of which Marican was an advocate. Yet Marican defended Petronas’s involvement in these non-core activities, stating that national necessity required the company to act. He also argued that Petronas would recoup at least some of its investment and whatever resources it had committed to auxiliary ventures aiding national development. For example, the Petronas Twin Towers would raise property values in Kuala Lumpur. Experts stated that it was a testimony to Marican and the Petronas management team that the company fared as well as it did when dealing with outside demands.

A Global Philosophy

Marican’s interests in multinational cooperation went beyond his duties for Petronas. In 2003 he presented a proposal to the World Conference of Islamic Scholars for the formation of what he called an Islamic Development Bank (IDB). Funded by a small percentage of the value of oil produced by its member countries, IDB would be run as a public corporation, with its governing board consisting of representatives with business experience from each country. Marican projected that even with the small initial investment the bank could be worth almost $3 billion. He argued that the proposed IDB not only would provide its member countries with economic benefits but also would alleviate some of the burdens associated with borrowing from external sources. By fostering fiscal independence, Marican suggested that the IDB would help governments focus on such issues as health care and education and would encourage cooperation among IDB countries.

Apart from the IDB proposal, Marican continued to be a strong advocate for the kind of sustainable development that he and Petronas proved could be successful. Marican noted (at the Sixth SPE International Conference on Health, Safety, and Environment in Oil and Gas Exploration and Production, March 20, 2002) the great difficulty in creating sustainable development, which he thought must meet four goals: “social progress that recognizes the needs of everyone, effective protection of the environment, prudent use of natural resources,” and maintenance of high levels of economic growth. In keeping with the partnership strategy he had spearheaded for Petronas, Marican argued for increased cooperation among petroleum companies, governments, aid agencies, and nongovernmental organizations to reach the goals he outlined. Marican’s development philosophy was shaped by his commitment to the Petronas mission. In his view, Petronas was formed to serve its home country and thus had an obligation to return what it could to the community. As part of Petronas’s business culture, this domestic mission extended to the company’s global partnerships. Marican remained committed to serving the global communities of which Petronas was a part.